The conventional distribution of products to consumers is, and always has been, a most inefficient process. Pipeline inventories tend to be much higher than necessary to support average consumer demand. Distribution times—from manufacturer to wholesaler to distributor to retailer to consumer—tend to be significantly longer than the time necessary to transport products from the manufacturer's shipping dock to the consumer's doorstep. Products often remain in warehouses for excessive periods of time. In conventional retailing, the allocation of overhead expense to each individual product sold represents a disproportionately high percentage of the retail price. On the consumer side, there are additional distribution costs such as the value of time expended to locate and select the desired products, the expense of driving to stores, and the additional cost of time and inconvenience of waiting in line at cash registers to pay for purchases.
With advances in Internet and online retailing technology, it was expected that inefficiencies associated with conventional product distribution could be significantly reduced—or even eliminated. The expectation was that Internet customers would simply place orders with various retailers and have products shipped directly to their homes. While this is exactly how electronic commerce operates at the present time, this business model is burdened by its own set of problems and gross inefficiencies. For example:                (1) The cost of processing, packing, and shipping an individual item from a distribution center to a consumer is substantially higher than the average unit cost of shipping a comparable item, in bulk, to a retailer.        (2) The requirement that a consumer be at home to accept delivery at random times during the day—especially delivery of perishable goods or items requiring the signature of a recipient—has proven to be an unexpected, major inconvenience.        (3) In an attempt to solve the home delivery problems discussed above, many consumers have created a brand new set of problems by using their employer's address for personal deliveries during the workday. Unfortunately, this “solution” creates a new problem—for the employer—by straining corporate mail system capacity and increasing corporate operating costs. As the problem grows, more and more employers are restricting this practice.        
Returning online purchases represents another major inconvenience—typically involving the following time-consuming steps the consumer must complete:                (1) Secure a return authorization from the distribution center.        (2) Follow packing instructions dictated by the distribution center.        (3) Prepare a bill of lading or other required shipping documents.        (4) Get the return shipment into the hands of a common carrier. If the distribution center elects to have the customer deliver the item to a designated common carrier facility, the customer must drive to the facility where a wait in line is almost inevitable before a carrier representative actually takes more of the customer's time to process the shipment. Alternatively, the distribution center may arrange to have a common carrier pick up the item in which case the customer is inconvenienced in a different way by being committed to be home during a time window, specified by the carrier, that may span several hours or a full day.        
Online retailing has also levied a heavy toll on our fragile environment. The delivery of ever-larger numbers of small parcels as individual shipments to consumers requires more and more trucks and fuel, results in increased vehicular traffic and pollution, and uses more and more non-biodegradable packaging materials such as foam and plastic.
In summary, today's consumer product distribution—either through conventional stores or online storefronts—is plagued with inefficiencies that typically raise the retail price of products to a level many times the manufacturing cost. The lack of an appropriate business model for the distribution of products to consumers limits many of the potential benefits that online merchandising can and should bring to society. These benefits include: (1) lower costs, (2) improved shopping convenience, (3) means to quickly locate any type of product, (4) broader selection of vendors, (5) increased variety of products, (6) ease of feature and price comparison, and (7) enhanced competition.
In conclusion, there is no Internet-based business model currently in operation that supports the efficient distribution of products to consumers.